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Iowa higher education a victim of state’s budget woes

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MahurinEcon_Thumb1_759.jpg

Iowa’s public universities are experiencing record enrollments but are being funded in real dollars at the same level as they were 30 years ago. In fact, no area of state government has taken more hits in funding over the past 10 years than Iowa’s Regent universities, according to the Legislative Services Agency.

The universities made up most of the cuts through efficiency measures — staff and faculty reduction, closing programs, reducing janitorial services — but average tuition increases have been increasing while nationally they have declined. The Regents say they would need to increase tuition by 38 percent to close the gap in appropriations from 2009. In the past two years, Regents absorbed 20 percent of the overall budget cuts. Over a period of 10 years, from FY 2001 to FY 2011, in-state tuition increased 99.7 percent.

At the community college level, enrollment increased 15 percent over the past five years while their appropriations remained largely stagnant as a percentage of state spending. The national stimulus plan would have provided $12 billion in investments to community colleges, but was whittled down to only $2 billion.

Iowa will see an average 5 percent increase in tuition for the 2011-12 academic year. But that number changes based on the program a student is enrolled in; nursing students at the University of Iowa will see the largest tuition increase in the nation with a nearly 40 percent rise.

Not all Regents agreed on the tuition increases, with both Ruth Harkin and Michael Gartner voting against it. Gartner had an alternative proposal.

“For every $7 million they add back to the Regents budget for fiscal 2012, we will cut the proposed 5 percent rate by one percentage point,” Gartner wrote in an op-ed. “If they added $35 million — which could be done quite easily — we’d agree not to raise tuition at all for resident undergraduates.”

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How Iowa Compares To Other States

Iowa’s public universities still rank at the bottom compared to peer schools in tuition and fees. Neighboring states Illinois and Minnesota both charge nearly double what Iowa’s universities do. Iowa has been able to keep tuition and fees below the national average throughout the past 10 years.

The average annual cost of public 2-year college in Iowa is $3,415, ranking the state 8th in the nation. Iowa ranks 25th for average annual costs of 4-year colleges at $13,831. This is including more than simply tuition and fees, like books and other education expenses, but not food or housing.

Tuition now accounts for 54 percent of general education revenue for public higher education, up from 20 percent in 1982. State appropriations have shrunk from 77 percent of revenue in the 1982 to 39 percent in FY 2011. The national average in FY 2009 was 63 percent of revenue came from state government appropriations.

Despite Illinois having a much higher tuition than Iowa, they surpass that 63 percent national average, as do other states like California and Texas. Arizona, which has tuition near or lower than Iowa’s levels and is towards the bottom in average student debt loads, provides 60 percent of public higher education revenue. There are states like Michigan which maintain higher tuition than Iowa and provide less state support directly to public universities.

Overall, Iowa ranks 2nd in the nation for per capita spending on higher education with $1,353, only behind New Mexico at $1,363, according to data compiled by the American Human Development Project.

The National Center for Public Policy and Higher Education says the cost of college has risen more than 450 percent since 1982, or four times the rate of the Consumer Price Index. The cost to attend postsecondary education is outpacing the median family family at a 2-to-1 rate, and is far surpassing the rate of increasing medical costs.

Students Push Back

Iowa is not seeing the same cuts as other states like California, and so few students have taken action to protest the cuts. This year a small crowd organized in Iowa City and students traveled by busloads to the state Capitol for the annual Regents’ day.

“The budget cuts that we make now are going to affect the University for the next week, next year, for the next 50 years,” said Jared Knight, Vice-President of the Iowa State Government of the Student Body.

Knight said he’s already seen the impact of cuts with class sizes, cleanliness of the facilities and technology available to students.

“Every single day we hear complaints from professors about technology not working–I mean, it’s Iowa State University of Science and Technology and we’re years behind in technology,” he added. “It’s a state school, it needs state support. Otherwise it might as well be a private school.”

The Board of Regents themselves have been vocal this year about their concern with the cuts. Regents president David Miles appeared alongside students at the Capitol. He and other board members have also written editorials, as have some professors and university administrators.

While cuts came last year, and Iowa now has a surplus, stimulus funds have dried up and the state faces a structural budget deficit.

The cuts force the universities to become leaner, which often means fewer class offerings and chances to utilize various labs on campus.

Gov. Terry Branstad said while he is proposing cuts for FY 2012, he wants to see a restoration of funding levels to higher education eventually. He said he took out student loans when he was an undergraduate and is sensitive to the cost of college, but insists he has an obligation to balance the budget.

“We have to get our financial house in order first,” Branstad told The Iowa Independent, when asked what stands in the way of increasing appropriations for the Regents. He added that the state is in a financial mess, and education makes up more than 60 percent of the budget, but remains hopeful as the economy improves Iowa could provide more support to higher education.

Iowa ranks near the bottom in terms of the size of the state’s budget gap, with a 6 percent shortfall.

Branstad has said he believes colleges need to be more efficient, and that was echoed by the Iowa State University College Republicans at the Regents day.

Iowa State President Gregory Geoffroy outlined what his university has done to make up the budget shortfalls, other than tuition increases:

Our many operational efficiencies and cost savings measures include: Administrative and program reorganizations in several colleges; elimination and downsizing research centers and institutes; new processes to gain efficiencies in information technology; and streamlined administrative functions. We restructured the statewide extension system in 2009, reducing the number of county and area directors by 77 positions and closing several regional offices. No other statewide Iowa government reorganization matches the scope of what we had to do in restructuring ISU Extension.

“We need to continue to find more efficiencies and, yes, it’s the Regents’ job to be mindful of tuition,” Miles told The Iowa Independent. “But a significant part of our budget for educating students comes from state appropriations.”

Miles said as much as he’d like to see a return to the support Regents got 30 years ago, he believes this year would be appropriate to begin to stabilize and move away from cutting further, even if an increase is not in the cards.

What Investing In Higher Education Means For The Rest Of The State

While $551,738,691 was appropriated to Regents in FY 2010, Miles said there was $8 billion in economic impact. This would mean Iowa receives around $14 back for every $1 put in to public higher education.

The universities also provide services to small businesses, helping more than 1,000 Iowa businesses each year with research and start-up opportunities, according to the Board of Regents. But the budget for Iowa State University’s economic development has gone from $3,019,446 in FY 2009 to potentially being cut to $935,233 in the Iowa House budget target for FY 2012.

A state relations officer for the Regents explained to The Iowa Independent the economic development includes five hours of free consultation for small businesses. A hand sanitizer company in Muscatine went through this fund to help define the chemical makeup of their product. Larger companies like John Deere had help from Iowa State to identify a problem on a pipe on their manufacturing line.

But without looking at what the state puts in, the higher the level of education an individual, the more they work and earn. That’s what the Iowa Policy Project argues; someone with a bachelor’s degree will earn on average $7.26 more an hour than a person with only high school diploma. The IPP would encourage the state to offer tuition scholarships for low-wage workers; their analysis finds it would return $3.70 for every dollar invested in a 2-year degree and $2.40 for each dollar invested in a bachelor’s degree.

Iowa is a relatively low-wage state, ranking 32nd nationally with a median personal income of $26,856, according again to the American Human Development Project. The state ranks 41st for those with at a professional or graduate degree with 7.33 percent of the population. Iowa is slightly better at 35th in the nation for those with at least a bachelor’s degree; 24.3 percent of the state’s population hold one.

A study by Georgetown’s Center on Education and the Workforce found Iowa will need 319,000 new, postsecondary-educated workers by 2018. Sixty-two percent of all Iowa jobs will require at least some higher education within seven years.

“America needs more workers with college degrees, certificates and industry certifications,” stated Anthony P. Carnevale, the Center’s director. “If we don’t address this need now, millions of jobs could go offshore.”

However, the barrier of the cost of college is prohibitive on many young people seeking to further their education. The results of a Associated Press and Viacom survey of 18- to 24-year-old students found them citing money over grades as the major reason for dropping out of college. Two-thirds of respondents work part-time jobs and 57 percent said they rely on loans. Still, 85 percent believed college was worth the high cost.

“It’s not partisan — it’s not about this particular legislator or this governor — it’s been going on for years,” Miles said. “Now that the economy has gotten a little better we’re saying to everyone, it’s time to reinvest.”

No budget has been decided in Iowa, and the legislature is now expected to go past their scheduled end of session. Senate Democrats are fighting against Branstad’s desire for a biennial budget, and other legislators are concerned about the governor’s transfer authority if he would be given a two-year budget.

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